Real Estate Upturn? (coupons, foreclosures, leasing) - Miami - Florida (FL) -Miami-Dade County - Page 2 - City-Data Forum

Wild Style · 12-21-2007, 09:34 AM

Quote:

Originally Posted by gbugmiami

I think things here are ugly. but i disagree with this. I still *have* seen houses sell recently for what i consider decent prices. (ie, my parents house, 20k off appraisal, worlds worst gringa grandma realtor, and it sold). Other friends too. There are still people that want to live here. There are still people moving here. If you have a skill/business that's needed here, you CAN do better than you could in alot of other places.

Correction will be = prices going to something people looking to buy can afford. I have friends here that make 150k a year, they will be buying and selling houses like nothing has ever happened. They of course arent buying my little biddy house. They would NOT be making that money in tennesee, north caroline, etc. Most of us here couldn't afford to live in what we have, were we to buy it today (me included). But we do what it takes to pay for the house/taxes/ins. My family in north fla pays 1/3 what I pay for insurance, and 1/2 to the same as I pay for taxes (for 2-3 times more house), and they thing THEY have it rough. Why? Its simple, they make less money up there. I had someone offer me a job doing almost exactly what I do here, for half the pay. People down here pay the premium to live down here, period. Its worth it to you, or its not. For me it was, and now its not.

Market Stability will happen sometime after correction. When things can reasonably sell within some sort of time frame (3-6 months?) without major price reductions. This will take A WHILE. Alot of idiots were enabled by various things recently to buy houses and pretty things they couldn't afford. This will have to clear up, all those forclosures sold, etc before there will be real correction or stability. But this is I think, more like half time. Cheap housing in Miami is gone for good. Wacko prices too, gone for now. There are of course deals out there, and forclosures would be what I was looking for. Were I to buy a house here now, it would not be one thats listed. If it was listed, Id offer you 50k less than apparaisal. And thats why my house isnt listed. (yet!)

the problem with that is, the average person is not making 150,000. The average person in south florida is making 28,000 to 30,000 a year (this is according to broward county and dade county numbers). The average house hold income is around 50,000 a year. So, yes a percentage of people are still able to buy, but most are not. With ARMs being phased out next month its going to be even harder for the average person to meet the requirements of a fixed rate loan (i.e. 20% down, verify income all that good stuff) and its going to push prices down even further. There is other information out there about upcoming events but i will leave that up to others to research.

My first degree is in Economics and one thing you learn as a economics major is prices can not out pace what the market can sustain. This recent up tick in housing prices was made possible by "exotic loans". Income did not rise high enough, fast enough, to warrant the recent housing prices. So then how did the prices shoot up? Well people kept raising prices, and consumers were able to sustain those prices via "exotic loans". With out those loans, homes would have just sat on the market until sellers were forced to give asking prices relative to the market they are in. So with the major amount of people being unable to raise the capital needed to purchase homes (with a fixed mortgage) that means prices will have to come down, its just good, simple, economics. It is going to be interesting to see what happens to people who haven't figured out whats coming yet. This isn't only for housing either, things are going to get bad.

gbugmiami · 12-21-2007, 10:02 AM

Ok, we agree on that, its just how bad its gonna get that were not sure on. I know I can sell my house in this crappy market for 2x what i paid for it, couldnt possibly refinance lower than the rate I have now, etc. So I have no worries. Lots of people do. I heard 1 in 32 houses down here was in forclosure, not sure if thats accurate. If so. Yikes. Another big problem is people arent 'upgrading' anymore, they kinda have to stay where they are with the increased tax burden, its just not worth it. Prices will go lower, but not like the good old days. Wish Id bought them all. Miami is now (for whatever reason) going to remain a 'premium' place to live, like southern california. Thats my guess.

Chelito23 · 12-22-2007, 01:23 PM

I agree with the previous poster. The prices of the 90s are never coming back. Too many people want to live here for whatever reason. Most people who own here bought before the bubble, and as others said, they most of us cannot afford to buy the homes we live in now.

I think prices will go down dramatically, but never to pre bubble prices OR "affordable" levels for the typical income earners.

I guess down the road, homes in the ghettos will be in the high 200s, in run down areas in the lower 300s, and small middle class homes from the mid 300s and up. I think the 450K for a single familt home in Little Havana is a pipe dream at this point, so prices will prob come down 25% from the peak when all is said in done.

CJFlorida · 12-22-2007, 01:48 PM

Quote:

Originally Posted by Chelito23

I agree with the previous poster. The prices of the 90s are never coming back. Too many people want to live here for whatever reason. Most people who own here bought before the bubble, and as others said, they most of us cannot afford to buy the homes we live in now.

I think prices will go down dramatically, but never to pre bubble prices OR "affordable" levels for the typical income earners.

I guess down the road, homes in the ghettos will be in the high 200s, in run down areas in the lower 300s, and small middle class homes from the mid 300s and up. I think the 450K for a single familt home in Little Havana is a pipe dream at this point, so prices will prob come down 25% from the peak when all is said in done.

I don't agree at all. I think 1990's prices, adjusted for inflation, will come back. The prices you have outlined above are impossible to sustain. Income minus expenses dictate housing prices.

The fundamentals are easy, 3 times area income at the most. Most people retiring from the north will buy small condos, townhouses, they are frugal people for the most part. Studies show the vast majority of retiring boomers have nothing in the bank. They will not buy inflated houses.

In the end, when you deduct all the expenses that have increased since 2000, people have less money to put towards principle and interest.

My hunch is in 3-4 years we will all be surprised at how low prices have fallen. I believe many parts of Florida will see prices LOWER than in 2000 eventually. People are tapped out long term. Many have already spent their futures and are mired in debt. A long, long housing bust is on the way.

gbugmiami · 12-22-2007, 03:15 PM

Got me. Looking out my window right now yeilds 1 (yes ONE) car older than mine. My house is small (1240 sf), yet my from my window i see:
A new lincoln, an eslcalade, a 7 series, a 5 series, a newish tahoe, a new (2k7 accord), brand new ford escape, etc. I may add the exception is my 1996 accord. People here seem to be coming up with some money, somehow.
I dont see that changing. Im not saying its right, im just saying it what I see.
edit - forgot the neighbors mecedes sl, but he's not home. And for the record, I could own any of the above, but choose to drive an old paid for car.

tallrick · 12-22-2007, 05:41 PM

Real estate will keep falling unless property taxes are eliminated. You forget that unlike LA and NYC there is no entertainment or financial center in Miami to support these utterly ridiculous prices.

*By the way, if rent only covers 1/2 your mortgage, doesn't that tell you the assessed value is way too high?

Chelito23 · 12-22-2007, 07:11 PM

I agree that the market is way overpriced...but people pay the big bucks to live in LA's horrible areas...and I see the same here. I wish prices would come back, but too many people have bought into the Miami dream...and try telling anyone here their 1950s 2 bedroom ranch home is worth 100K. Nobody will accespt what the REAL value is anymore, the prices were inflated way too much.

There is just too much speculation and money pouring in from other productive economies...and many people view this as paradise and will pay the ludicrous prices. I hope they come down, but as Tallrick has said before, short of a Cat 5, I don't see that happening.

gbugmiami · 12-23-2007, 03:14 PM

Real value is what someone will pay for it, no more no less. If YOU think an average house here is 150k, and someone else thinks its $300k, no offense, but Im selling it to them. I agree Miami is no financial or entertainment center like LA or NY, and incomes simply don't compare. But there is lots of opportunity here. (Service jobs mostly, im not talking Ivy league). And the reality is some Yahoos simply like it here. And other yahoo's are wanting to move here. And this place even with its problems is a huge step up for alot of people coming from other countries. I have a feeling we can be paying 10k a year for taxes, and 10k for insurance, and SOMEONE still calls this place paradise. But It wont be me.

Chelito23 · 12-23-2007, 04:58 PM

Exactly my point...I made friends with a neighbor who rented the cottage behind the house next door to mine...and she said that the ad for her apartment said it was located in the "Historic Latin Quarter"...and listed as a cozy spanish mediterranean style detached apartment. What that really means is an old in laws quarter apartment with no central air in Little Havana...but the marketing works. People do pay these ridiculous prices and then they see what they get (or don't get) and consequently move on pretty quickly...there is a lot of turnover in home ownership and renters in this area.

tallrick · 12-23-2007, 05:40 PM

But in Miami there's no Latin quarter, it's more like the 3/4 lol! Good thing there are smarter people posting to this forum that those buying Miami real estate! The way prices keep up is from the turnover, or from those families willing to all live under the same roof. You would be amazed how many people in their 30's and 40's still live with their parents in south Florida. Where a friend of mine lives (also lives in his birth home) it's near Calle Ocho and he's surrounded by apartments, the renters change places several times a year. As long as people THINK this area is paradise they will continue to pour money here. But we all know that it will come to an end someday. The trick is whether it will be in our lifetimes or in the 22'nd century. Dade county started to become overpriced in the 80's and even if modest homes come down in price the waterfront and island homes will always be very, very expensive. Oh I forgot to mention another possibility..LOL!

http://www.rsmas.miami.edu/res-sheets/tsunami.html (broken link)